Aw, Dave thinks for himself...just has a different world view than I do. I tell ya, it's a lot more reasonable debating him than the politics blogs on my local paper...those folks are incredibly vitriolic (both sides). Besides, I think there's plenty of blame to go around for this one...
I read that the problem could be fixed with a change in accounting rule, adopting a Market To Market. What's that?
I have personal experience with these folks....sitting across the table from them on several occasions wherein material business transactions were held hostage and BILLIONS in "low income" credit and CRA loans were extorted. Yes, that is the proper term. We knew that the probability of repayment was minmal at best.....BILLIONS. Was that the root cause of the crisis? No. Did it contribute? Yes, without question. Was that a material cost to taxpayers? Yes, without question. FYI, at the time, there was no Bush in office.....
Krebsie, if you cap credit card rates at 10% fixed, you will surely solve the card issue.....there will be none offered. Problem solved.....the equivalent would be for the Feds to cap your office machine pricing at less than your cost....how many would you sell?
Way out of my league here, Terry...what I heard was that the problem could be helped by doing away with a mandatory mark to market accounting practice...which I totally don't understand. http://volokh.com/posts/1222113191.shtml
I see what you're saying here but to say Bush had a license to ride with his first Congress is simply not the case. The Dems dug in and took the 'he is not my President' stand-point from Day 1. Furthermore, I would respect your opinion on the subject a lot more if I were to have read some scathing critique of this current clusterf*ck of a Congress that we have now. You were always handy with the stats and red flags to pin things on Bush and the Republicans. I have expressed my own disappointment with Bush on more than one occassion.. However, you seem to be rather quiet on this Congress. They vowed so much, yet all we have seen is total economic collapse.. We thought we knew rising gas prices until this lot took their seats.. Now we know we're on our way to Euro level gas prices... Yet you remain quiet.
Yeah this Congress was elected to do 2 things, get us out of Iraq in 100 days and take on Big Oil and get the price of gas down. 0-2.
.....another of the issues contributing to the current credit crisis. "Mark to market" accounting refers to the the method by which financial assets are valued on the books of the purchasing firm.....most relevant here is financial institutions. Some portion of the assets that a bank holds on its books must be held/measured at "market" value. As market value declines, the value of the assets on bank balance sheets declines thereby reducing the level of bank capital which is significant in that the amount of credit that banks can extend is a direct function of its capital position.....as capital positions erode, so to does the banks capacity to lend.....all banks. Wall Street banks, regional banks and main street banks.....a vicious cycle that we have seen play out and reduce bank capital positions by tens of billions thereby reducing credit available to the economy by a mere TRILLION dollars or so - hence the credit crisis. The "mark to market" controversy has come to a head because of the uncertainties of valuing many sophisticated financial assets.....if nobody is buying them the "marks" are of dubious value based upon dubious assumptions yet capital is impaired and credit constrained.....
From what I've read the Mark to Market problem arises from the Sarbanes-Oxley legislation. It requires those holding the mortgage backed securities to evaluate them based on that day's market value rather than the value of the underlying mortgages. If the underlying mortgages might be worth, 80% after forclosure, but the securities are selling for $.20 on the dollar, the bank has to evaluate the asset as the $.20.
A shopping trip. When the going gets tough, the tough go shopping. Seriously, mark to market has been a rule for a long time in the investment business for the traditional investment firms who carried market instruments on their books. I'm not familiar with Sarbanes-Oxley, but in the wake of Enron it's easy to see how and why they expanded the concept to encompass all types of investments and accounting firms.
Well they have failed miserably and I don't defend their record at all but I would like to see what they might do with a Dem in the whitehouse. To say the Dems when in minority "held" Bush back from anything of major consequence including guiding Wall Street to better results or convincing him to get out of Iraq when they gained majority is a little puzzling.
Who are you and what have you done with Dave? I wondered how long it was going to take for you to come and chime in on this topic. I was pleasantly surprised to see the restraint you used. That kind of response should spark meaningful discussion.
Well, he tried every year to reform Fannie and Freddie, and they blocked him every year. OTOH...what has this congress passed or done that has been vetoed by Bush? You are not supposed to "guide" a free market to results...you are supposed to ensure that it is honest and let it run free.
As Stu said... what did Bush veto? What exactly would be different with a Dem executive branch? I will go a step further and offer this... The Republican Revolution produced the Contract with America. That produced ten bills in the first 100 days. The Dems played up a similar promise, but have delivered nothing whereas the Contract with America actually DID bring about the ten bills. Some of whom were shot down in Veto by the President, but there was by God action.... What we've received from this Congress is excuses, vacations, blame, a collapsing economy and exploding gas prices like we've never seen before. Why oh why do they deserve another chance? Would Obama really make that big of a difference?
No one pays attention but this Congress has not lived up to a single promise it made on Day One. To call this a party of reform and change is laughable.
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